Latest Gleadell market update - Friday 9th November 2007

FEED WHEAT

Old crop wheat remains volatile with little buying interest for both domestic and export wheat.

Winter wheat plantings continue in Northern hemisphere – supported by good weather conditions.

EU-27 2008 wheat plantings estimated by analysts to be between 5-10% higher year-on-year

Summary

The market continues to drift lower as demand remains sluggish. End-users remain well covered pre-Christmas

showing little enthusiasm in extending their cover positions for 2008. Reports of increased wheat plantings and

no current weather related problems could limit any potential upside price movement, for old and new crop.

OILSEED RAPE

The crude oil market has hit new highs again this week despite OPEC increasing their November production. The US government are suggesting that even with OPEC's production increases the rising demand will not allow the US to re-build stocks and as a result have increased their long term price predictions for crude oil.

However, EU-27 rapeseed has failed to push through to new contract highs; in fact it has struggled to maintain existing levels. The crushers have taken long rape oil positions in anticipation of bio-diesel processors coming to the market, but until they do (which might not be until the New Year) they will not buy any significant volumes of seed.

With the crush largely out of the market, the futures market has been the only hedge for trading houses buying farm seed and this is keeping a cap on prices. Farmers who need to sell seed in the November – January position should really make their commitment sooner rather than later.

MALTING BARLEY

The EU market is coming under increasing pressure due to long holders needing to sell but with the EU buyers being well covered, especially pre-Christmas. This problem is likely to spill into January which is a short month. You should expect the price to weaken in the short-term unless we get any bad news from Australia. There is still a reasonable demand February onwards and with high nitrogen, germination and infestations problems throughout Europe the market will be tight for these periods and prices could again rise in the longer term.

The new crop market is also coming under pressure as sellers throughout the EU take advantage of selling large volumes of new crop at what are excellent premiums. We continue to advise you to sell some of your 2008 crop at what are excellent premiums.

* FEED WHEAT by David Sheppard, managing director. Telephone 01427 421222 or email david.sheppard@gleadell.co.uk

* OILSEED RAPE by Jonathan Lane, OSR trader. Telephone 01427 421222 or email jonathan.lane@gleadell.co.uk

* MALTING BARLEY by Stuart Shand, malting barley and retail director. Telephone 01427 421227 or email stuart.shand@gleadell.co.uk